Hyatt Hotels Corporation Stock Upgraded (H)

NEW YORK ( TheStreet) -- Hyatt Hotels Corporation (NYSE: H) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • H's revenue growth trails the industry average of 14.2%. Since the same quarter one year prior, revenues slightly increased by 2.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • H's debt-to-equity ratio is very low at 0.26 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.60, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has increased to $128.00 million or 10.34% when compared to the same quarter last year. In addition, HYATT HOTELS CORP has also vastly surpassed the industry average cash flow growth rate of -81.91%.
  • HYATT HOTELS CORP has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, HYATT HOTELS CORP turned its bottom line around by earning $0.35 versus -$0.04 in the prior year. This year, the market expects an improvement in earnings ($0.63 versus $0.35).
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, HYATT HOTELS CORP's return on equity significantly trails that of both the industry average and the S&P 500.

Hyatt Hotels Corporation and its subsidiaries engage in the management, franchising, ownership, and development of Hyatt-branded hotels, resorts, and residential and vacation ownership properties worldwide. The company has a P/E ratio of 133.2, above the average leisure industry P/E ratio of 116.6 and above the S&P 500 P/E ratio of 17.7. Hyatt Hotels has a market cap of $1.82 billion and is part of the services sector and leisure industry. Shares are up 14.1% year to date as of the close of trading on Thursday.

You can view the full Hyatt Hotels Ratings Report or get investment ideas from our investment research center.